UK Bans ‘Refer a Friend’ Bonuses With Tougher Crypto Marketing Rules
Businesses marketing crypto assets to U.K. consumers will have to abide by stricter advertising rules presented by the country’s financial watchdog. These include prohibiting ‘refer a friend’ bonuses for the industry as well as introducing a cooling-off period for first time investors.
Regulator Clamps Down on Crypto Ads, Wants to Make Risks Clearer to British Buyers in Marketing
The U.K.’s Financial Conduct Authority (FCA) announced on Thursday new regulations for the advertising of crypto assets to the public. Under the tougher rules, crypto firms must ensure that British investors have “appropriate knowledge and experience to invest in crypto” and are duly warned by promoters about associated risks.
The measures include banning ‘refer a friend’ bonuses, a marketing policy quite popular in the crypto space. The FCA also requires companies advertising crypto assets to U.K. consumers to introduce a cooling-off period for first time investors from Oct. 8, 2023.
The latter begins when a potential investor responds to crypto advertising materials by requesting additional information, the FCA explained, quoted by Bloomberg. The entity marketing the investment must then wait 24 hours before responding to the customer’s request.
The updated rules follow government legislation to bring crypto promotions into the regulator’s remit, the watchdog noted, adding that its approach regarding crypto promotion is consistent with the rules that the FCA imposed last year to tackle misleading financial adverts.
Quoted in the press release, FCA Executive Director Consumers and Competition, Sheldon Mills, stated that Brits should be aware that crypto assets remain largely unregulated and risky. “Those who invest should be prepared to lose all their money,” he pointed out and insisted:
It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision. Our rules give people the time and the right risk warnings to make an informed choice.
The FCA further remarked that the new regulations enter into force after its own research showed that the estimated crypto ownership in the U.K. has more than doubled in 2022, compared to the previous year. It said that 10% of 2,000 people polled revealed they owned cryptocurrencies.
Do you think other regulators in the region will introduce similar advertising rules for the crypto sector? Tell us in the comments section below.
Source: Bitcoin.com
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